Biz Ladies: A Quick Look at Health Care Reform and What You Need to Know

Today’s Biz Ladies post comes to us from George Geldin, the owner and operator of Geldin Insurance Services, an insurance agency in Westlake Village, California. George is a member in good standing of the National Association of Insurance & Financial Advisors (NAIFA) and the National Association of Health Underwriters (NAHU) and has been presented with the symbol of NAHU’s highest level of achievement, the Golden Eagle Award, for outstanding work in health insurance sales for ten consecutive years. Today, George offers us a brief explanation and helpful information regarding the recent health care reforms that will go into effect starting in 2014. While the topic can be a bit overwhelming, he gives us a synthesized explanation and the bullet points of what we need to know. Thank you, George, for helping us better understand these new reforms and prepare for the coming changes. —Stephanie

Read the full post after the jump…

The Patient Protection and Affordable Care Act, (PPACA) signed into law on March 23, 2010, is a voluminous complex law that is spawning many, many regulations. The general purpose of the law is to make health insurance accessible to all and to make it affordable to those in need.

So what does this mean for business owners? Here’s a brief and quick glimpse at what you need to know as a starter and general broad stroke primer:

Larger-scale Businesses

Businesses of 50 full time employees or full time equivalent employees or more will be required to offer affordable health insurance to its employees, beginning 1/1/2015 (this date was recently pushed forward from the original 1/1/2014 beginning date). If a business has part time employees, the total hours worked by the staff will be divided up to see how many full time equivalent people are working in the operation (clearly, this was put into place to discourage employees from cutting employees to part time to avoid being required to offer insurance).

The penalty for an employer who does not offer coverage when the law stipulates they should is $2,000 per employee per year. Many employers who currently do not offer insurance will be doing calculations to see if it will be less expensive to pay the penalty (non-tax deductible) or pay for the health insurance (tax deductible).

Smaller Businesses

Businesses of less than 50 employees are not required to offer health insurance. If one of these businesses does offer coverage, it will continue to be a tax deductible expense.

Individuals

For individuals who need to obtain individual health insurance, all health insurance will be guarantee issue effective 1/1/2014, with the enrollment scheduled to begin 10/1/2013.

“Guarantee Issue” means that people can acquire health insurance without answering any questions regarding their health history. Someone with Cancer, for example, can sign up for coverage as easily as someone with no health issues, and all applicants in the same age group, living in the same zip code will be charged the same rate for the same plan. In addition, all pre-existing conditions will be covered on day one of the coverage.

In order to make sure the insurance is affordable, each state will have an insurance exchange or marketplace available — some will be run by the state itself and some will be run by the federal government.

In California, Covered California is the exchange where people can enroll on individual health insurance and obtain a subsidy from the Government in order to help pay for the cost of the health insurance. For example, if a single CA tax filer makes between $14,856 and $44,680 in their modified adjusted gross income, that person would be eligible for a subsidy from the government to help pay for the insurance. It’s on a sliding scale and so the more you make between those numbers, the less assistance you would get. In California, if your modified adjusted gross income is $14,856 or less, then you qualify for Medicaid, or in California it is Medi-Cal.

People will be able to purchase health insurance for themselves outside the Exchange as there will be many options available, but in order to obtain a subsidy, the insurance must be purchased through the Exchange.

Notifying Your Employees

The Department of Labor just announced that the notification form for circulation to employees is optional, however, it’s always a good idea to keep your employees aware of any changes being made. Check out this sample notification form for further explanation.

This is an obviously complicated and detailed topic, so for more information and resources, please visit:

I am so proud of Design Sponge for featuring this article! One item I would add — there is plenty in the law to encourage employers, including small employers, to offer health insurance to their employees. The SHOP Marketplace is open to employers with 50 or fewer full time employees, and allows employers to compare health plans online, qualify for a small business health care tax credit, and control the coverage offered and how much you pay towards employee premiums. Healthcare.gov is a great resource; more information on SHOP is here: https://www.healthcare.gov/what-is-the-shop-marketplace/

Thank you for posting this! Kaiser Family Foundation also has an easy-to-use calculator worth checking out, too. I’m covered by Blue Cross right now but I loved how easy this was and that the language was straight-forward: http://kff.org/interactive/subsidy-calculator/

I work for one of the state exchanges (“marketplaces”) slated to open for shopping October 1. While I’m happy to see information on here about health care reform, I think that a different source would provide better information for your Biz Lady readers, who are likely small business owners. Insurance brokers generally aren’t promoting exchanges because they see them as a threat to their business model–the exchanges/marketplaces provide an easy comparison shopping experience for individuals and small businesses. Small biz with fewer than 50 employees can get a 50% rebate (yes, 50%) on the cost of premiums when they buy through their state’s exchange. In some states, there are additional subsidies and incentive programs in addition to that 50%. Go to Healthcare.gov to see what is being offered in your state!

What if you OFFER coverage to employees but they decline it (Large or small business)? Does that mean that the employees are required to purchase individual coverage? Is there any penalty for an employer if employees decline coverage? Do employers need to document that employees have coverage elsewhere? Is there a standardized form that needs to be filled out if an employee denies offered coverage? I know this has been pushed to 2015, but I like to make sure I’m doing things correctly.

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